Episode 158 - The Vital Few of Warren B.

The Thursday Thesis  - 4/7/2019

Unless you - like me - are a geek, chances are that you’ve never heard of Warren Buffet, the American investor, businessman and philanthropist.

Now, Warren is an interesting guy – maybe even a genius – content to conquer the world of investing from Omaha, Nebraska rather than a glass tower on Wall Street.

In fact, Warren thinks differently about almost everything; “observe the masses, do the contrary” could almost be his mantra.

Here are a few key points about “The Sage of Omaha”

• He is 88 years old and is still in love with his work
• He has an estimated net worth of 88 Billion dollars, but reportedly takes a salary of only $100,000 per year
• He limits how many deals he does each year, to avoid becoming scattered and unable to go deeply into each deal
• He still lives in the house he bought in 1958 for $31,000
• He drives a standard Cadillac car – no Lamborghinis, Ferraris or extravagant supercars
• He plays bridge for 12 hours a week
• He has pledged to donate 99% of his net worth to the Bill and Melinda Gates Foundation on his death: until then he wants to grow as big a pot to donate as he can.
• He plays ukulele and often breaks out into song at shareholder meetings of his firm, Berkshire Hathaway, and the businesses he invests in.

Apart from his philosophy of thinking long-term and being frugal, Warren has a pretty cool trick up his sleeve when it comes to managing his time – here’s an overview of the process:

First he makes a list of his top 25 goals.

From that list he identifies the top 5 goals.

His top 5 goals go on his List One: The Vital Few things which will make all the difference.

The other 20 goals go onto his List Two: the Avoid-At-All-Costs List.

I think that’s brilliantly simple – and I’m whittling away at the unnecessary things in my own life in order to focus on the “Vital Few” things which will be of greatest value to me and the people I love.

It’s a very clear system, but it requires discipline and focus to stick to it, because it’s hard to let go of things we love – even when they don’t serve us – and it’s hard to resist the temptation of short-term pleasure in order to achieve a long-term goal.

But above all else, Buffett’s system demands we understand what is important to us.

So, put the kettle on and brew yourself a nice cup of tea, then sit quietly and mull over the questions:

What would be on your Vital Few list?

What would you have to disregard in order to have only 5 things on your own Vital Few list?

Your answers could change your life.
 
 
© Neil Cowmeadow 2019
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